Matt Rainey/The Star-LedgerGov. Chris Christie at the Statehouse in Trenton in this February 2010 file photo.

TRENTON — New Jersey’s latest cap on local property tax hikes goes into effect in less than a month, but Gov. Christie and Democratic lawmakers remain deadlocked on reforms that both sides concede are crucial to make the cap work.

The new limit, passed in July by Christie and the Legislature, lowers the current 4 percent cap down to just 2 percent. It goes into effect on Jan. 1.

Both Christie and Democratic legislative leaders stressed during the summer that local government reforms also had to be enacted to give local officials enough room to cut costs while preserving their ability to deliver services.

Those companion bills, however, are still not in place. Both sides say they are confident a compromise can be reached, and the latest meeting on the issue is scheduled for today.

While some proposed reforms have already moved easily through the Assembly and Senate since July, key legislation — including proposed changes to the arbitration process that governs contract disputes between police officers and firefighters and their local government employers — has not.

Christie, who offers a near-daily countdown to Jan. 1, has repeatedly pressed the Legislature to pass the package of 33 bills he put forward earlier this year, reforms he calls the “tool kit” for local leaders.

“We’re now five months since that agreement, where everybody stood up here and said, ‘We’ve got to have that tool kit,’” Christie said during a Statehouse news conference on Friday.

“So now we’re getting down to brass tacks and it’s time to make some decisions,” he said.

But Democrats have their own ideas on reforming local government and are also questioning whether Christie’s reforms can do much to lower the state’s high property tax bills, which averaged a statewide record of $7,281 in 2009.

The most visible disagreement thus far has been on the bid to reform the arbitration process, which helps guide contract negotiations all over the state.

Christie wants to see arbitrators bound by a new law that would prohibit them from awarding annual raises that would push local governments above the new 2 percent cap on property tax hikes.

A compromise bill put forward by Democratic leaders also includes the 2 percent limit, but takes other costs, such as health care, outside of the cap. And the Democrats’ legislation would sunset in three years unless renewed.

Minutes after Democrats release 'toolkit' compromise, Christie threatens to veto itLedger Live for Tuesday November 23, 2010 - Ledger Live with Brian Donohue. The Democrats presented a compromise proposal to Gov. Chris Christie's 'toolkit' today in Trenton. Minutes after they announced their plan, where the Democrats seemed confident that Christie would like their plan, Christie held his own press conference where he called their plan 'watered down' and said it was full of holes like swiss cheese. This puts the legislature and the governor back where they started with Christie saying they aren't doing their job.

“We’ve built a strong consensus around a responsible plan that will help taxpayers and protect the rights of police and firefighters,” said Assembly Speaker Sheila Oliver, D-Essex. “It’s now time for everyone to put the theatrics aside and join us in doing what’s best for New Jersey.”

Democrats have also warned that even if all 33 bills put forward by Christie become law by Jan. 1, they will not offset the cuts in aid that local governments suffered in the latest state budget — cuts they pin on the governor. Municipalities, school boards and county governments have all said layoffs are looming.

“Unfortunately, the tool kit will help, but it’s not going to fix [the problem],” said Senate President Steve Sweeney, D-Gloucester, at a recent meeting of local leaders in Atlantic City. “The cuts are what caused taxes to go up.”

Property owners who are frustrated by Trenton’s inability to address the property tax issue don’t have to just sit on the sidelines as their bills continue to go up, said Hackensack-based attorney Carl Rizzo, who specializes in tax appeals.

Many properties are assessed too high right now due to the poor economy and property owners could see their tax bills reduced through an appeal, Rizzo said.

Most tax attorneys will offer a preliminary analysis for free and many towns are willing to settle before a long and costly court battle, he said.

“You’re just dumping money down the drain by not even looking at it,” he said. “There’s money out there to be had.”